Tech

October chip sales slip worldwide, but gain in U.S.

BenjaminPimentel

SAN FRANCISCO (MarketWatch) - October chip sales slipped worldwide, but jumped in the United States, as the holiday season helped the semiconductor industry's recovery, an industry group said Monday.

Global chip sales totaled $21.7 billion in October, down 3.5% from the year-earlier-period as the industry struggled through one of the most severe downturns in its history, the Semiconductor Industry Association said Monday.

But microprocessor revenues were also 5.1% higher than in September, as manufacturers ramped production ahead of the holiday season, the SIA said.

Sales in all geographic regions also rose sequentially, and actually jumped 14.1% year-over-year in the United States.

"Inventory management throughout the supply chain has been very tight, and this may extend the fourth-quarter build season by a few weeks," SIA President George Scalise said in a statement. "As semiconductor sales are increasingly driven by the performance of the overall global economy our sales are reflecting the improved economic conditions in our world markets."

Still, some analysts have counseled caution on the chip industry, warning of the risk of inventory overshooting demand.

In a Monday note, Barclays Capital analyst Tim Luke noted that the semiconductor group is "poised for a period of slower momentum in its revisions and year-over-year comparisons into the fourth quarter of 2009 and first quarter of calendar year 2010."

"We observe that the SIA data after the strength in the third quarter of 2009 appears to show modest moderation in October 2009 on a month-over-month basis," he wrote. "However, trends still indicate better than seasonal averages."

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